Tech View: Nifty shows signs of waning bullishness. What traders should do on Tuesday

Suggesting a pause in the momentum, Nifty on Monday ended 38 points lower to form a Bullish Harami candle on the daily chart. The index made lower tops and also closed below the 20-day moving average.

“We believe that the markets have taken a breather after the sharp rise seen last week. So any corrections are likely to be short-lived and can be utilised to buy into quality stocks. Immediate resistance is now at 21,483,” said Subash Gangadharan, senior technical and derivative analyst at HDFC Securities.

On the hourly charts, RSI indicator saw a bearish crossover within the oversold zone, hinting at a waning bullishness in the market, analysts said.

OI data showed that on the Call side, the highest OI observed was at 21,500 followed by 21,600 strike prices while on the Put side, the highest OI was at 21,300 strike price. On the other hand, Bank Nifty has support at 47,650-47,500 while resistance is placed at 48,100 and 48,200 levels.

What should traders do? Here’s what analysts said:

Rupak De, LKP Securities

A decline below 21,350 could lead to a correction towards 21,220/21,100 in the short term. Conversely, resistance is anticipated at 21,500 on the higher end.

Rajesh Bhosale, technical analyst, Angel One

Caution is warranted as prices approach a key resistance zone, marked by indicators in high overbought territory. This resistance zone lies in the range of 21,500 to 21,600, representing the 200% reciprocal retracement of October’s price fall. Technically, this level also signifies the near-term target. Consequently, as we approach this critical juncture, a correction, either in terms of time or price, may become overdue.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)